Essential Components of a Water Banking System

Water Law Resource August 7, 2012 — 923 views

A water banking system is used for leasing water for a certain period of time on a voluntary basis between water rights holders and users. According to the University of Nevada Reno, water banking provides temporary transfers of water entitlements when a user needs water under special circumstances. It is treated as an economic good or commodity, as a bank balances its supply and demand.

The New York Times states that water banking has been embraced as a tool for making water supplies marketable, reliable and sustainable. Environmentalists and farmers agree the practice is a useful strategy for managing this vital and finite resource. Water banking is the way of dealing with unavoidable circumstances such as climate change that results in earlier snow melts when the need for water storage is increased during the spring.

A water bank is a mechanism that facilitates the transfer of water use entitlements from one location to another. These exist in almost all Western states, but there are differences in the way each operates in regards to sales and pricing. The State of Washington Department of Ecology explains water banking systems not only facilitate water rights transfers, but also create a reliable water supply during dry years, ensure a water supply for people, fish and farms, resolve issues of inequity between groundwater and surface-water users, and promote water conservation by encouraging right holders to conserve the resource.

Groundwater banking is the practice of recharging specific amounts of water in a groundwater basin for later use. This practice typically uses aquifers for storage purposes and offers other water users the opportunity to store water there, according to Pacific Institute. Some of the advantages of water banking, compared to over-surface reservoirs, include the fact that groundwater storage is typically considered to be more environmentally friendly and also reduces evaporative losses.

Water stored underground generally has lower capital costs, however annual operation and maintenance costs may be higher with water banking. This is especially the case in terms of recovery costs like pumping water for withdrawal during dry years. There are other concerns around groundwater banking programs, such as a program's ability to transport water out of a water basin during water transfers. However, two-on-one banking is one method that is thought to ensure water remains in the basin.

Water banking systems should provide properly trained management to help coordinate groundwater transfers and improve basin conditions. A water market system can facilitate an efficient use of scarce water and provide an essential commodity to a community.